[Exclusive] Hyundai Engineering Begins IPO Process... Emergence of a '10 Trillion' Valuation Giant

RFP Sent to Major Domestic Securities Firms... Lead Manager Selection Expected as Early as Next Month
Signal for Hyundai Motor Group's Corporate Governance Restructuring

Chung Eui-sun, Chairman of Hyundai Motor Group

[Asia Economy Reporter Minwoo Lee] Hyundai Engineering, an unlisted construction company under Hyundai Motor Group, is planning to list on the KOSPI within this year. It is expected to become a major player with a corporate value exceeding 10 trillion won, and analysts suggest it could serve as a signal for Hyundai Motor Group's corporate governance restructuring.

According to the investment banking (IB) industry on the 13th, Hyundai Engineering sent a Request for Proposal (RFP) for KOSPI listing to major domestic securities firms on the 9th. The proposal was sent not only to major domestic large securities firms such as Mirae Asset Securities, Korea Investment & Securities, NH Investment & Securities, Shinhan Financial Investment, KB Securities, and Hana Financial Investment, but also to foreign securities firms including Credit Suisse (CS) Securities. After receiving proposals by the 26th, the lead underwriters are expected to be finalized in early next month.

The listing is anticipated to occur within this year, possibly as early as the third quarter. This is due to concerns that if the economic recovery stabilizes around the end of the year, changes in various policy directions and shifts in the stock market trend could increase external uncertainties. A financial investment industry official stated, "Typically, companies list within six months after receiving proposals, and since the stock market is expected to rise steadily without major corrections due to economic recovery optimism until the third quarter this year, they will likely aim to complete the process within this year, before the fourth quarter."

Hyundai Engineering's valuation is estimated to exceed 10 trillion won. On the over-the-counter stock trading platform ‘Securities Plus Unlisted’, Hyundai Engineering’s unlisted shares recorded 995,000 won the day before. Based on the number of issued shares as of December 31 last year, 7,595,341 shares, the market capitalization amounts to approximately 7.5574 trillion won. A securities firm official said, "Considering Hyundai Engineering’s corporate scale and over-the-counter stock price, an estimated market capitalization of 10 trillion won will likely be presented during the lead underwriter selection presentation."

SK IE Technology (SKIET), Krafton, Kakao Bank, and Kakao Pay are all expected to enter the stock market this year with valuations exceeding several trillion won. However, since most of these are new technology-based growth companies in sectors such as secondary batteries, gaming, and fintech (finance + technology), Hyundai Engineering’s listing marks the emergence of a major player in traditional industries after a long time. Especially, it is expected to have a greater ripple effect not only because of its size but also because it could serve as a signal for Hyundai Motor Group’s corporate governance restructuring under the leadership of Chairman Euisun Chung.